The Federal Reserve Board has issued revisions to Regulation E, which implements the Electronic Fund Transfer Act. Besides requiring merchants who convert check payments into electronic fund transfers to notify consumers and get their authorization for the transfer, the revisions specify the type of disclosures required at automated teller machines (ATMs).

The newly required disclosures are intended to answer questions and address complaints that some consumers have about electronic check conversions. The mandatory compliance date is Jan. 1, 2007.

New rules inform customers of speedy debiting
Merchants must inform a consumer who pays with a check that if the check is converted electronically the funds may be debited from the consumer’s account the same day the check is written. This information must be posted conspicuously, and a written copy of the information must be provided at the time of the transaction (on the receipt, for example). The consumer must also be told that the check will not be returned by the financial institution.

ATM transaction disclosures spelled out
Currently, ATM operators are required to post a sign stating that the user will incur a fee for a transaction even if a fee is charged only in some instances. Under the revised regulation, ATM signage can now state that a fee may be imposed, on the condition that a user does not always pay a fee.

Payroll cards brought under Reg E
The Board also issued an interim rule for comment that makes employer-issued payroll card accounts subject to Reg E. Under this rule, financial institutions will have to make certain information regarding payroll card accounts, such as account balances, available to cardholders. However, financial institutions will not have to provide periodic statements in paper form, as they do for traditional accounts. Instead, account information may be provided through a telephone line, the Internet, or in response to an oral or written request.

The interim rule goes into effect July 1, 2007, and comments are due March 13, 2006.